The Value of Advertising

Advertising increases value for consumers

By allowing companies to differentiate themselves and highlight their unique selling points, advertising stimulates competition in the marketplace.


Competition, in turn, means companies need to keep improving the value of their products for their consumers: pushing down prices and pushing up quality.

Just think how competition among TV manufacturers has brought about a steep fall in the price of flat-screen televisions while simultaneously increasing both their image quality and their size.

The link between advertising, competition and consumer value is immediate: when bans on advertising were lifted in some US states, the prices of spectacles fell by 30-40% thanks to increased public awareness and competition.1



Advertising promotes choice

Clothes, car insurance, computers, holidays... we have never had so much choice as consumers. Yet we all have different tastes and needs. No single product is right for everyone.


Companies use advertising to tell us about the distinct products they offer in response to this diversity. When you see an ad for coffee, for example, it can

Inform you about lower prices (e.g. 'buy one get one free' promotion).
Tell you about differences in quality (e.g. improved packaging that keeps the coffee fresh longer).
Tell you about the options that best fit your individual tastes and values (e.g. coffee certified with the 'Fair Trade' label).
Inform you about the options that best suit your lifestyle (e.g. coffee capsules for instant espresso).
Advertising, in other words, allows companies to provide a much broader range of options than would otherwise be the case. By telling us about them, advertising ensures that we don't need to settle for second best. It helps us exercise our right to choose.